There’s some interesting evidence of the impact of social grants, contained in an article by Kristin Palitza of IPS, looking at the recent increases in the social grants in South Africa, recently announced by Finance Minister, Pravin Gordhan. The article focuses on the impact of the extension of the Child Support Grant to children up to the age of 18, as well as small increases in the size of that grant and the Old Age Pension.
But what is interesting is research highlighted by Josee Koch of the Regional Hunger and Vulnerability Programme as well as David Neves, from the Institute for Poverty, Land and Agrarian Studies of the University of the Western Cape. Koch and Neves refer to studies that show that, contrary to what some skeptics might say:
- Social grants are an investment, not a waste of money: “For every Rand (0.13 dollars) you pay out in social grants, you gain three Rands (0.4 dollars) in local economy,” Koch is quoted as saying.
- Social grants are used wisely by recipients: “Although concerns about the misuse of cash transfers keeps coming up, all our evidence suggests that it’s not true,” Neves says in Palitza’s piece. This is backed up by solid data. According to Koch as quoted in the article: “Children whose parents receive the CSG are on average two centimeters taller than those who do not.” This shows money is spent on food, not on alcohol or gambling.
- And finally, the article points to research showing that social grants do not make people idle and lazy: “households that receive a pension have a 12 percent higher work participation rate, Koch explains, which points to the fact that cash transfers free up family members to look for work.”